Google it!

As part of our web presence we tried to be listed on the major search engines. Yes, search engines will track your web-site even without your active participation but we wanted a listing that we have more control of. While Yahoo was very unresponsive we found that it is easy to work with Google. They suggested key words and rates and we chose what seemed the best fit for us. In addition we pay for a tracking service and so we are able to see how many people are visiting our web-site and how they are finding us. This supply us with another way to judge the efficiency of the different online advertising channels that we use and pay for. it is also interesting to see the locations from which people are coming and what attracts them on our web-site. Yes we are a little Internet crazy but we believe that this is an important tool and try to utilize it as much as we can.

Booking engines... PMS...GDS...

The terminology can be very confusing and the money involved pretty hefty so I will try in very few words to shed some light on this 21st century trend in hospitality.

PMS- Property-Management- System, are programmes that give you a software to manage your room inventory and reservation.

When operating on your web-site they are booking engines and guests can look at your rooms, rates and availability and book what they like without actually talking to you.

GDS - Global -Distribution- System, refers to world wide Internet reservation system run and managed by several companies and used widely by travel agents and all the big travelling agencies like Expedia, Travelocity, Orbits, Priceline and so on. There are companies who can offer you software that will interlink all three parts and create "one efficient seamless booking machine". As you can imagine each section of the reservation- booking, costs money and you will also end up paying commissions on each reservation made online plus a flat fee for the service.

It is quiet a competition out there and you want to be seen. The price however makes it very hard to swallow. There is also something that is lost, the ability to talk directly with people. Evaluate their needs and make them feel unique and special.

Internet presence

People say "if you are not on the net you do not exist". I happen to think that nowadays this is true. Everyone is surfing and whenever we need any kind of information our first instinct is to search on the Internet. So having a pleasing web site is an important thing for every business and especially a hospitality business, when so much booking is done online.

So your web presence have at least 3 key components to it.

a. Developing a web-site

b. Adding a booking engine.

c. Advertising on the Internet.

Each one of this components is, in my opinion, crucial. All are also costly so you need to give it some thought.

Developing a web-site. When we bought the motel it had a web-site. The web-site was and still is hosted by a professional company. However pretty early we realized that we need more control over it. We need to be able to add things or take them away and make it live. So this winter we purchased a software and design the web-site from the start. It is now completely "ours". We gave it a different look, add information that was not there but most of all we can now, with ease, change it every time that we want and it takes minutes.

I can already see the change when I look at our tracking information. Yes, we also are paying to belong to a tracking system that tells us how many people visit our site and where they are coming from. The main change is that people seem to stay more in the site, visit more pages and respond better to new information like specials. Again, money invested is showing results even if indirectly. Designing a web-site is not difficult if you have a software that is user friendly. Deciding how to design, what kind of look to give your web-site, that is challenging. We were lucky to have the original site that we liked and we kept parts of it. Things like color scheme, graphics etc' require a lot of time and planning. The wording of course are not less challenging. What to say and how much. I believe that a picture is worth a thousand words... so whenever I can, I will use more pictures and less words. We kept few rules all through the site.

1. Like I said less words more pictures/ graphics.

2. A constant color and style all through the site.

3. A navigation bar that lets you navigate with ease between the pages.

4. 90% of the information that is important to us is on the first page.

5. We have a side navigation bar that shows on each page and lets you go to the booking engine.

Again the main assumption that we kept in mind is that people do not want to spend a lot of time reading and they are generally looking to get the info as fast as possible. So they need to see the most important things within the first few seconds otherwise they will get bored and leave.

Little things means a lot.

Little things go a long way. Investing in your guests means paying attention to many seemingly small things. I spend a lot of time on lets see...soaps for example. What kind of soap to put in the rooms that will look nice, smell nice and give an impression of an somewhat upscale place. Towels are another example. I like big bath towels and so I purchased for the motel the biggest that I could find. Breakfast was another investment that we did. Even though it means more money we are continuously updating what we give our guests. Adding more items. We realized how important breakfast is and how it gives the guests a sense of added value. We added tables to the breakfast room and opened it all through the winter which meant heating it even if there are only handful of guests.

All these things means more money that needs to be spend. It is especially tricky because this is the sort of investment that you cannot actually see the direct return and you have to believe that every happy guest brings another or better yet comes back.

Word of mouth

All the money in the world will not help you if you turn unhappy customers who will than tell others about you. So, in other words your best advertisement is your gusts. What it means is that when you invest in your guests you are investing in this kind of advertisement - word to mouth.

It is hard to measure how much business this gets your way but here are some examples. Return customers speak volumes of how well you did. They are the backbone of a small motel especially when times are bad. Your return customers and other content guests send other guests your way. The best story that I can recall are two people who stopped by one afternoon to book a room. They told us that they spoke with some people that they never met before in a rest stop, on the side of the road and when they told them where they are heading these people recommended us.

Guests who come for one night and stay for two or three are our favorites. They step out of the road just because and the next morning they will come and express how satisfied they are and ask to extend their stay. Next year some of them will call ahead and book...you got yourself another returning customer.

With the Internet evaluating and reviewing hospitality facilities by their customers became more and more prevalent. The biggest and most trusted is Trip advisor. Very few people now days will pick a place to sleep, or dine, without looking at the reviews. Make sure that your customers write about their stay. I can't even count the people who booked a room after telling us that they read about us in Trip advisor and liking what they read.

Avertise...!! advertise...advertise ?

If you do not advertise than no one will know about your business. If you advertise too much you will have no money to run your business. So somewhere in the middle, as with so many other things, lies the truth.

You need to advertise but you need to pick and choose.

We get few advertisement suggestions almost every day. At the beginning we spoke with every one. We thought and thought. In time we learned to sift through then and decide what important and practical for us. We learned what advertisement costs make sense and which are way over the top. We learned to ask questions and evaluate. But most of all we learned to say "NO". As a rule we advertise where we think that we have at least one of two things; large exposure, and a target group. The large exposure comes usually from the Internet (on our web presence in the coming post) search engines, online booking agents, hospitality sites, chamber of commerce and the AAA/AARP. We show on all of them. Some approached us and some we reached out for.

The target groups are special interest groups that we believe will find interest in our type of hospitality and location and thus we approach them and ask to be included in their advertisement.

Examples are, bikers, religious groups, traveling with pets etc'

We test the results for a period of time and either continue or cancel our advertisement. Just make sure that you understand what you are paying for before you enter into a contract that will cost you a lot of money. Money that you can invest in the motel.

Cannot please everyone, all the time.

You can try, but it is impossible. Some people are very hard to please. It has nothing to do with you. It is them, most of the time.

It might come up as a legitimate complain, but once you start talking to them, or if they stay for more than a night you will realize that this is how they treat most of the things in their world.

It can come in many different ways. "The room is fine but....the smell, the noise, the shower curtain, the color of the floor....Don't get me wrong, we treat each remark with the utmost seriousness. We check it up, think about it. Many times even make some changes if it make sense and it is practical. We actually ask people to tell us if everything is OK. Being a guest you see things in a different way so it is very helpful when people tell us what they think. I am also not talking about all those people who are very grumpy at check-in time as we realize that many times they are just tired and the next morning they will be different and relaxed. No, it those people that no matter what you do or say will remain unsatisfied. We learn to tone it down, keep smiling, and wait for them to leave.

Our gustes

They come in all shapes...and honestly we feel really lucky because most of them are very nice. They are happy to be here and looking forward to a nice vacation. We are happy to have them here and are trying our best to make them feel welcomed.

We love this area, there are many things to do here. We enjoy sharing what we know with our guests. Giving out maps and guide books, telling them where to go and where to eat.

When we chose this motel in this location this was what we had in mind. We did not want to be just a road motel where you stop for a night. We wanted to be in a place that people come to for vacation and possibly stay more than one night. Some come a year after year and they feel almost like a family.

Of course the interesting stories are about the guests that are different, demanding, sometimes annoying, those who make you question your decision to run a motel in the first place. I will give them their share in the coming blogs.

Those winter days....

It starts with a sigh of relief. Finally we do not have to get up early. I love the slow mornings. We have time for a leisurely cup of coffee, reading the paper, surf on the computer. The rest of the day is usually devoted to ...SNOW. It is amazing how much time snow can take. Shoveling, than waiting for the plow to come, than shoveling again the snow that he pushed in front of the rooms. Than the roof. Shoveling a pathway to the fire wood in the back. Shoveling a pathway to the generator and around it. Shoveling a path to the gas tanks.

Some paper work, bills, reservations,

Is it going to snow again tomorrow?

Those summer days

So here is a sample of a typical summer day.

6:30 am - wake up.

6:45 am - 7:30 get breakfast ready for the guests.

7:30 am - open the doors.

7:30am - 9:30 breakfast. Have to make sure that there is enough of everything, talk to the guests. Give maps and directions. Suggest activities.

9:30 am - 11:00 clean up and entertain the late comers....talk to the stuff and give info as to what needs to be done.

11:00 am -11:30 eat breakfast and plan the day.

11:30 am -2:00pm unless there is something special that need to be done, routine maintenance in buildings, rooms, lawn. Also taking reservations and talking to people on the phone.

2:00 pm - 3:30/4:00 lunch and trying to rest.

4:00pm - 10:30 - mostly check in time, making sure that guests will get a pleasant reception and answers to their questions, more phone calls, some routine issues; light bulbs, extra blankets, remotes that refuse to work etc'

While all these is going on we try to check supplies and reorder, finish some laundry that was not done, check the rooms to make sure that they are clean and ready, pay bills, do some food shopping for the next day breakfast.

11:00 pm -11:30 bed time.

The first days as motel ownwers

"It is really very simple" we were told over and over by our broker. And the sellers, once the negotiating was over all they wanted was to hand us the keys and drive into the sunset. A day or so and you will know everything that needs to done. We compromised on a week.

It is quiet simple once you have done it for awhile but the first weeks were extremely hectic. We took over in the midth of summer which is high season. With close to 100% occupancy. People are coming and going all day long. I think that we did not sit until winter descended. By that time we were so tired we fell asleep any time any place. The beauty of running a hospitality business is that is very varied, somewhat unpredictable and in the busy seasons - fast moving.

The day starts very early (usually 6:00 am) and ends at midnight. All that time you have to be ready to answer, explain, smile, listen, change lights, TV remotes, give extra blankets and even...yes, chase flies.

People expect you to be there for them, and rightly so.

Most are nice and pleasant but some even though they are not, are still your guests.

Yet, when we finally manage to stop for a minute and breath, we knew, if we mange to go through the first season, we can do it.

Is this the one?

It took us almost two years to locate a property that was close enough to what we wanted. By than we have physically visited close to 30 places.

Those 30 were chosen after collecting the information from many listings and deciding that they are "close enough" for us to take the time and go see them.

We put an offer and thus started chapter 2 of the journey. Inspection, appraisal, negotiating. Going over the fine details will always reveal things that you did not know and should have. Things that you are not happy about. Patience and caution are the name of the game. Talking through the real estate agent make the process even more complicated and time consuming so if you can communicate directly with the seller/s this might ease the process. It took us almost 4 month to complete the transaction. There were tense moments till the very end. Moments in which we thought of calling the whole thing off. I am glad now that we did not.

Ups and Downs

So you spend hours on the Internet, more hours speaking with real estate agent, many of which will not return phone calls, or send the needed information. Wondering about sellers who while putting their properties for sale cannot or will not supply any meaningful information. Finally you line up few places and make the necessary arrangements to see them. Assuming the weather is cooperative and everyone shows up you finally get to see the property.

Now comes the real part. The place does not at all look like the pictures you were shown. You detect all kind of structural problems. Rooms look old and un appealing...the list goes on and on.

There always seems to be another "story" behind and you need to have the patience and persistence to find it.

Why is the property being sold?

Why now?

What is going on in the area?

What kind of gusts does this property attracts?

What kind of routine maintenance has been done and what is going to be handed to you?

In what condition are the furniture and beds in the rooms?

Is there enough linen, and other amenities.

The list seems endless but theses items are important and some very costly.

It is very easy to get frustrated, tired, angry. We called the search off several times and took a break. But if you really want it, eventually you will line few properties that seem to have most of the characteristics that are important to you.

Searching for the right place.

So... a small motel up to 25 rooms. With asking price that will not exceed 4 times the gross income. That was a beginning of a thread. We still had no idea where we are going to look for it and how will we know that this is the right one for us.

It was time to actually look at some places and get a better feel as to what we like and what turns us off. This was a very important lesson. If at the beginning, while searching the Internet, we were looking at places all over the U.S.A, we now realized that you cannot really "see" a property without actually visiting it. So now we narrowed the search to 3 states; Maine, New Hampshire and Vermont. All within a day driving distance. We located motels "for sale" in these states that were in our price range and asked to see them.

Seeing a motel, we found out, after visiting few is really not much different than seeing any other property. Every motel has a private residence and motel rooms. You go through them and have to decide whether you like what you see (assuming that you did your preliminary work and you established that the price is right).

We decided very early in the process that if the motel does not look like a place that we as travelers will be willing to spend a night in, there is no point of thinking about it any further.

Than come the over all feeling from the location, the way the rooms look (and smell), is the private residence going to work for you and your family.

Of course, it is a business, but one you are going to be in 24 hours, 365 days. So you should at least like it.

We knew that we wanted the motel to have some land around it and yet realized that we will need to compromise. Visibility is very crucial and you cannot be very remote. People want to be close to a town and its' conveniences. We are still amazed at how important it is every day, when people check in and their first question is - "where can we go to eat".

Unless you are very unique, you need to be seen as "walk-ins" are a very big part of successful business.

So, visibility yet some land was one of our first clues for the right place.

A livable owner residence, big enough for us and convenient and PRIVATE.

A place that have tourist appeal, as we felt that we want a place that people want to come and visit.

Family oriented, a place that will lend itself to families. here again the land was important.

A small breakfast room. We are not big on cooking but believe that offering breakfast is a big appeal.

And last but not least an overall good feeling about the place. This is not something that you can explain but we are big believers in that gut feeling and it served us well in the past. Even if everything seems OK but you do not get that " good, I can live and work here" feeling, walk away.

On the search

So where and how to begin the search for a motel/B&B/campground.
When we started all we had was that vague idea that we would like to purchase a hospitality property, live there and run it. We were looking for a change. Not just the one coming from a different job or a new place to live. We were looking for a more profound change. We thought that this is the road to take.
Other than that we had no prior experience of running a motel or what does it take to buy one.
So like every other journey this one started with gathering information.
Reading...that is usually my part. Talking to real estate agents especially the ones that were nice enough to share some of their experience in this field. Sea ch engines that deal with commercial properties sometimes have also some general information.
Probably one of the best advice came from one of the real estate agents that we spoke with who made us understand the difference, very important, between purchasing a hospitality property as a hobby, or part time job, versus purchasing one as a full time livelihood.
The key has a lot to do with size. We understood pretty early in the process that to make it a livelihood we will have to go with at least 10 -11 units/rooms. So in that way we could narrow the search and this is also why very early in the process we ruled out B&Bs as most of them are small or extremly expensive.
So we decided to look for a small motel 15-25 rooms. And that how we srarted the search.

More about income.

Cannot stress enough this point. If you make a bad choice, you are going to spend your days (and nights) worrying instead of enjoying your guests. You might have to look for other sources of income outside. So again, the main question to be asked is - can this property support itself and me.

You will end up looking at a lot of numbers, do it! and if you do not feel like you know enough, hire a professional. Do not hesitate to ask questions, and than some more. Remember, once you bought it it is yours for better or worth and hospitality properties are not easy to sell.

There is no easy way to asses value but we found that going with this simple first check can rule very quickly most of the properties that will not work for us.

So...

Gross income x 4 = asking price.

Or

Net income x 10 = asking price.

These numbers should work, any asking price higher than that you should be leery of.

Any asking price lower than that look deeper to get more information, after all no one would sell a property for less than its worth.

Check expenses as a percentage of the gross income (remember, if it exceeds 50-60% ask for more info)

If all theses figures seem OK it is time to proceed.

Income part a.

Income is the by far the biggest issue when buying any new business.
We did a lot of research trying to understand the relationship between - asking price and declared income. While many sellers will justify the asking price by giving you a list of all the things that they did to improve the property, the bottom line is - can this motel/B&B/ campground actually generate enough income to make it worthwhile for you.
This point cannot be stressed enough.
For all of you who are not coming from the financial world here it is in simple terms.
The Gross income (from rental, vending machines, gift shop etc') - Expenses = Net Income
This figure should be enough to support your mortgage and any other personal expenses.
If it does not...walk away. This property will not work for you.
Does it have a future scenario? well than you will have to decide if the future will put bread on your table.
We found few more ways to look at the numbers.
In general - asking price should not exceed 4 times the gross income.
Also- watch for those expenses. They should not exceed 50% of the gross income.

Location...Location

When we started our search we opened it to the whole U.S.A. We searched in places we never ever heard of. Talked to agents all over the country. Looked at endless amount of web-sites and written materials. Then we realizes that it is not very practical. There is no way to really asses a property if you cannot physically visit it.

Pictures over the net can do a lot of justice or injustice and there is also this vague thing called feeling. You visit the place, does it make you feel good. If you do not like it, how can you convince some else?

So we narrowed our search to an area within a day travel (back and forth). We also decided that even if it is going to be a motel we are not interested in a regular "on the road" place. We want a place that people will choose as a vacation spot and optionally stay more that one night. We want vacationeres, who will come to see the area and that we can direct to the different attractions. We wanted a place that have some open land around it yet with good visibility. You might think that this is easy, none of it was. Formulating the things that were important to us took a lot of time and thought. Finding the right place took even more.

Type, location, income.

Few more thoughts on these three main questions that should be asked...and asked again whenever you go on this quest for a hospitality property.
What type...
A B&B is a very special kind of hospitality. If owning a lodging facility is a 24 hour commitment, this one seemed to us as 48 hr one!!!
I was leery of the need to do so much of the work myself, which is often the case in B&Bs. Cleaning the rooms, making breakfast, being on call at all times and having no privacy.
it seemed to us that the only way to generate income will be to have very high rates which will bring very demanding guests. Most B&Bs that we visited had a small restaurant and made more income this way. We did not want to do that.
For awhile we considered a campground. Less room cleaning. A summer crowd. A winter time off . They are usually sitting on a lot of land and a swimming pool or a lake. This seemed very promising.
We looked for a long time, we looked all over the U.S and could not locate even one that the cash flaw made any sense at all. This one is still a mystery to me.
So, we finally decided what we want is a small motel.
15-25 rooms. Some land. Good visibility but not right on a busy road. Some staff to help in the busy season. And in an area where the guests are tourists. We wanted to work with people who come for vacation and thus in a good mood and eager to learn about the area and its' attractions.
Mind you, it took us 2 years of soul searching, Internet searching and physical searching to come to this point.

Still searching

We thought that we wanted a B&B. I love big old houses and thought that this will be great, sharing a great house like that with guests. It became obvious to us after seeing few and talking to their owners that this is not the way for us. The reasons: B&Bs represent a certain type of lodging. Very elegant rooms, a lot of old furnitures, and yes....breakfast.
Also, you live in the house and there is very little privacy.
And last but not least, the money issue.
If this is your house and has been for years and now you want to convert it, that is entirely different. But purchasing a B&B that someone else built is usually an expensive deal. You pay a lot for what the owners did. Your income however is depending in most cases on very few rooms.
Remember, this is a business and as such needs to pay for all the expenses, mortgage, your living expenses and still generate some income...
In our search we encounters very few B&Bs that had such cash flow.
In most cases the house was in the family for a long time or the owners, one or two of them worked elsewhere to generate more income.

Three main things...

When I think back to the purchase process I know that it was long and sometimes we felt as if we are going in circles. It will be impossible to remember it all.

Few things however became very clear to us as we were looking at properties and speaking with real estate agents and owners.

* You should keep your goal in mind,

What are the characteristics of the property you are looking for. A small motel, B&B, Campground. Search for what it means to own each one and what fits your personality.

* Location - where do you want to live, since this is going to be your home. And to be even more specific. Do you want some land, do you want to be in a town, in a tourist area...and so on.

* Money - it is all about money. The money that you have for the purchase and the money that the business can generate, because, yes, after all you are purchasing a business.

How to start.

Buying a motel....actually we had no idea where to start.

We were not even sure what kind of motel we want. For awhile we were toying with several ideas. A B&B due to my love to old buildings. or maybe a campground, where we can work over the summer and than recall our old life over the winter. Where to look? We were living in Maine, should we stay in Maine? should we search elsewhere?. How to locate properties for sale and how to determins which one is viable one?

Definetly more questions than answers.

We spend hours...days, trying to get some answers. Realizing that the correct answers are crucial to an effective search. Talking to real estate agents, searching the internet. but mostly talking to one another. I know now that buying a motel or any other hospitaliy property for this matter, is a long process. Unless you are strictly an investor with spare money, you want to be careful and choose the right one for you.

It took us TWO years of hard work and I understand now that this is normal.

When did it all began

About 4 years ago, in the midth of sort of a crisis. We were searching for something new to do, something exciting. Surprisingly we both came with the same idea...motel.

Quiet strange as neither of us had ant prior experience.

I was coming back after 2 weeks of being away and we had a long talk about "the future".

It took 2 years from that day till we accomplished the purchase of our motel. Two years with many ups and downs. Many times we even considered giving up.

The process of searching, looking, evaluating is very stressful. Especially when you have to cover new ground.

Why blog

So that I can share my thoughts and follow this exciting process of buying and managing a small motel.

Welcome

This is my first post.